Union, Maybe

The future of labor-management relations is as complicated as ever.

A Volkswagen assembly plant in Tennessee was the scene of a highly charged union election with no clear favorite between the two parties involved.

The intensity between pro- and anti-union groups grew heated leading up to the February 2014 election, perhaps due in part to the recent success of labor groups in the Volunteer State, where membership in 2013 rose to 6.1 percent of Tennessee’s workforce from 4.8 percent in 2012, according to the U.S. Labor Department. The results were close, but ultimately, the autoworkers voted 712-626 to reject unionization under the United Auto Workers.

In Tennessee, in restaurant kitchens across the U.S. and even Northwestern University’s football locker room, labor unions — with the support of a labor-friendly National Labor Relations Board — continue to push for new members despite high-profile defeats like at Volkswagen’s Chattanooga plant. New approaches and the rise of worker centers should keep employers evaluating the evolving face of organized labor for years to come.

Despite increased union figures in Tennessee, the UAW’s loss in Chattanooga wasn’t unusual for a labor group attempting to organize factory workers in the South. However, what was unique to this organizing campaign was the neutrality of Volkswagen’s leadership and its plans to establish an on-site work council — the first of its kind in the United States — if the workforce approved unionization. Work councils, groups composed of both workers and management that establish labor standards for their facility, are common in European and Japanese factories.

Reasons for the Decline

A 2011 ruling by the National Labor Relations Board, known colloquially as the Specialty Healthcare decision, has provided a new opportunity for unions and a new area of concern for employers looking to remain completely union-free.

In the Specialty Healthcare case, the NLRB established that a small “microunit” of certified nursing assistants at a Mobile, Alabama, nursing home was an appropriate bargaining unit.

The controversial decision created a new standard in labor organizing, overturning the long-standing precedent of “wall-to-wall” approval of union representation, labor experts explained.

“Invariably in organizing at production facilities, there are pockets of workers more interested in unions than others,” said Keith White, a partner at the employment law firm Barnes & Thornburg in Indianapolis. “The bottom line of the Specialty Healthcare decision is: If a union can’t get the whole place organized, they can at least laser in on a small group to go after and get some new members as opposed to none.”

Theoretically the Specialty Healthcare decision could make it easier for unions to enter an employer’s facility. But considering national union membership rates have dipped slightly — to 11.3 percent in 2013 from 11.8 percent 2011 — one could argue it hasn’t had too much of an effect on labor-management relations.

The “ruling is a concern, but I don’t think it’s been utilized as much as the fear, probably because unions would rather have the whole enchilada, too. They’d rather have 100 members paying dues rather than one department of 10,” White said.

—Max Mihelich

“It was a hugely significant election result. The efforts to use a work council in the U.S., and the efforts of VW to remain neutral, is potentially a significant change in labor relations,” said Phil Rosen, a shareholder at law firm Jackson Lewis in New York. “It was an effort at a new, more cooperative model, and it was a very close election.”

The German automaker, which declined requests for comment, could still implement a work council at its Chattanooga factory without the UAW. Other international automakers with operations in the South, such as BMW and Mercedes-Benz, could attempt to do the same thing, Rosen said.

In a broader sense, the UAW’s willingness to have a more cooperative approach to unionizing workers in the South seems to align with what Gary Chaison, a professor of industrial relations at Clark University in Worcester, Massachusetts, sees as one way to increase dwindling national union membership rates, which currently sit at 11.3 percent of the U.S. workforce, or 14.5 million workers.

Since the U.S. Labor Department started tracking union membership rates in 1983, the number of workers belonging to unions has declined steadily. That year, 20.1 percent of the U.S. workforce was unionized.

The current membership rate is buoyed by public sector employees, 35.3 percent of whom claim union membership, compared with only 6.7 percent of private-sector workers.

Some unions argue tough labor laws are partly to blame for the decline, but Chaison disagrees, saying it overlooks the actual problems unions face. He said he believes unions need to spend more of their money on recruiting and organizing.

Keith White, a partner at employment law firm Barnes & Thornburg in Indianapolis, echoed that sentiment. “If you’re cutting resources to sales, which is what organizing is, you can expect to see poorer results.”

Another explanation is organized labor’s poor public image as only looking after its own interests — not the workers’ — and being responsible for lost jobs, Chaison said.

Better Standards

Perhaps yet another reason for the decline in membership is because of unions’ push to establish better labor standards for all workers. Historic pieces of legislation codified into federal labor standards first were championed by unions, such as a minimum wage, the workplace safety standards enforced by the Occupational Safety and Health Administration and various workers’ compensation laws, to name a few.

As a result of their success, union groups have had to focus on new concerns to win over workers.

“Unions are badly in need of a new audience and new goals,” Chaison said.

A new audience could come from an unlikely team: college athletes. The UAW, along with the National College Players Association, aided outgoing quarterback Kain Colter and several of his teammates on the Northwestern University football team in filing a petition with the National Labor Relations Board to unionize in January.

“Right now the NCAA is like a dictatorship. No one represents us in negotiations. The only way things are going to change is if players have a union,” said Colter in an AFL-CIO news release.

The football players’ petition intensified the national debate on whether college athletes should be paid. But Jay Krupin, a partner at BakerHostetler in Washington, D.C., said he believes the goal of the Northwestern players isn’t necessarily to receive payment, but to change how student-athletes are compensated if injured.

“I think the real issue is not that they want to be treated as employees but things like safety and what would be viewed as workers’ compensation issues,” Krupin said.

Like a last-minute Hail Mary pass, the players’ petition was unlikely to prove successful, according to legal experts. However, on March 26, the NLRB approved the petition.

“The idea that a student-athlete is an employee is a very difficult assignment to prove,” Krupin said. “They probably have a valid concern, but the way they’re trying to bring it about, by unionizing, is probably not an ideal vehicle to do so.”

Now that the NLRB has approved the players’ petition, all student-athletes at Northwestern could be considered employees of the university and be eligible to unionize. Further, student-athletes at other private universities could also have the same rights.

The Northwestern situation “probably started out as a one-off. Now it looks like something that could branch out and be significantly broader,” Rosen said. Because the NLRB found “that the student-athletes are employee-athletes, it would open up a tremendous opportunity for unions that employers and universities will have to be aware of.”

The university will appeal the NLRB’s decision.

Low-Wage Workers

Low-wage workers are important to the future for labor organizers, in part because they’re often doing jobs that cannot be off-shored and represent potential gains in union membership. In 2013 only 1.3 percent of workers in the food-service industry held union membership.

In an effort to win the support of low-wage workers, some unions have backed movements to raise the federal minimum wage to at least $10 per hour.

The key phrase in this situation seems to be “union support,” as unions have not been pushing for service industry employees to become union members. Some labor experts say union support for raising the minimum wage while not pushing membership is part of a strategy to appear more favorably in the public eye and, more importantly, the eyes of service industry workers.

“If you’re a union, you need to collect dues to maintain your business, but if you organize employees at or just above the minimum wage, it’s hard to convince those employees to take $50 out of their paychecks for representation,” White said. “That’s why you’ve seen unions supporting Wal-Mart employees, for example, but you haven’t seen a lot of success in organizing those employees. I suspect in a way it comes down to the cost of representation, and employees choose not to move forward because they don’t want to pay that much in dues.”

According to a Gallup Inc. poll released in November 2013 — two months before President Barack Obama’s call to raise the minimum wage to $10.10 per hour — 71 percent of Americans supported raising the minimum wage to $9 per hour.

Although raising the minimum wage to $10.10 may cost the economy 500,000 jobs, according to the Congressional Budget Office, such a move could lift some 900,000 people out of poverty, and give 16.5 million workers a raise.

As shown by the low membership rates of unionized service industry employees, unions have been largely unsuccessful in organizing low-wage workers. But where unions have failed with those workers, a relatively new kind of organization — the worker center — has enjoyed success.

In the early 1990s there were only five known worker centers, whereas there are at least 200 operating today with more planned, which speaks well to their level of success.

Worker centers, which are nonprofit groups funded by charitable donations, have been incorrectly accused of being fronts for unions, in part because of the financial support they receive from labor groups. Worker centers act as a resource center for many low-wage workers needing legal advice. Often worker centers bring together religious leaders and labor activists to improve the working conditions of low-wage immigrant workers in the United States, or to reclaim wages illegally withheld by employers.

While most labor groups back worker centers and their support for low-wage workers, unions try to appeal to their traditional audiences by pushing for “increases in wages, job security and pension security,” Krupin said.

Ultimately, despite the consistent decline in membership rates, it would be premature to declare the demise of organized labor, White said, adding that the battle for workers’ rights will always exist.

“I certainly wouldn’t declare them dead,” he said. “In fact from a regulatory and legal standpoint, organizing laws are improving.”